Virnetx loses Cisco case: VPNs not its property

Non-practising entity VirnetX has had its patent case against Cisco dumped by a Texas jury, meaning it won't be seeing any of the $US258 million it had demanded of the networking giant.

The low-profile company with links to the national security community via Science Applications International Corp issued its demands in 2010, demanding a slice of the $US1 billion Cisco had pulled in VPN-related revenue since 2005. It had been emboldened by a settlement of $US200 million paid by Microsoft in 2010 over similar accusations.

Apple was ordered to pay $US368.2 million for violating the same patents.

This trial does not invalidate the patents – they're still under review. In fact, as Bloomberg notes, Cisco was prevented from telling the jury about preliminary rejection of the patents by the USPTO.

Last week, Cisco told the House Judiciary Committee on patent legislation that fighting cases brought by non-practising entities – around 50 a year – costs it $US50 million annually.

Cisco had a muted response to the win, with in-house general counsel Mark Chandler expressing “gratitude” at the win and vowing to continue defending itself against patent lawsuits that lack merit. ®